Post secondary certificates vs. four-year degrees

Governor Snyder is in the vanguard of elected officials and business leaders who are pushing for more Michigan students to pursue occupational certificates and associate degrees with an occupational major rather than a four-year degree, particularly in non STEM fields. Supposedly we have too many of the latter and too few of the former to meet the needs of employers.

Lets leave aside for the moment the belief, by too many of our political and business leaders, that higher education is designed to meet the needs of today’s employers. At least for other people’s children. Rather in this post I want to focus on whether having lots of adults with certificates and fewer with four year degrees is a path to prosperity.

A soon to be released report pushing for higher post-secondary completion in Michigan provides the data. The report adopts the Lumina Foundation goal of sixty percent of adults with a “meaningful” post secondary credential. The proportion Lumina and many others believe is needed to fill the jobs of the future. The sixty percent, of course, includes those with associate degrees as well a bachelors degrees or more. The meaningful becomes relevant in calculating which occupational certificates to include.

The report lists the top ten states in 25-64 year olds with post-secondary educational credentials. At the top of the list is Georgia. Fourth is Massachusetts. Georgia has sixty percent of its adults with a post secondary credential, Massachusetts more than fifty eight percent. But there the similarity ends. Of the top ten states Georgia has by far the most with credentials (23.0 percent) and the second fewest with four year degrees of more (29.6%). Massachusetts the most with four year degrees or more (42.4 percent) and the third fewest with credentials (8.0 percent).

So if conventional wisdom is right Georgia should have a high proportion of its residents working and in high wage jobs. Massachusetts not so much. Conventional wisdom would have it that Massachusetts has too few adults with the skills employers are looking for in high wage mid skill/skilled trades jobs and too many with four year degrees that employers don’t want consigning degree holders to low wage/low skill jobs largely hospitality and retail jobs. Think again!

The July unemployment rate in Georgia is 6.0 percent, in Massachusetts its 4.7 percent. The proportion of those 16 and older in 2014 working in Georgia was 57.6 percent, in Massachusetts it was 61.6 percent. Even greater is the difference between the two states in wages and income. Massachusetts in 2013 was second in per capita income ($57,200), Georgia 40th ($37,800). In terms of net employment earnings (employer paid wages and benefits) per capita Massachusetts ranked second, Georgia 34th. Average wages in 2014 in Georgia were $44,700, in Massachusetts $57,600. Median wages: Massachusetts $44,700, Georgia $32,800.

So across the board in terms of employment, wages and income residents of Massachusetts are far better off than residents of Georgia. One of the major reasons is that Massachusetts residents are far better educated than Georgians. At both the state and metropolitan area level the most prosperous places––except those benefiting from high commodity prices––are those with the highest proportion of adults with a four year degree or more.

Clearly Michiganders would be better off having an economy like Massachusetts rather than Georgia. But we can’t get there unless we have more, not fewer, adults with four year degrees. Do we need more adults with mid skill/skilled trades occupational credentials? Of course. But not instead of more adults with four year degrees. We need even more of them. Michigan in 2013 was 33rd in the proportion of adults with a four year degree which is a major factor in our being 37th in per capita income. Unless the state improves on its ranking of 33rd Michigan is almost certain to remain one of the nation’s poorest states.

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.